Recently, the economy of China has encountered numerous issues. However, it seems that the investors are taking into account the financial reports only now. Most of these reports show that this financial engine is slowly falling apart.

There are a few distinctive signs, which relate to the behavior of the Chinese markets. The most significant ones are the price for copper, which has literally got crushed, and the credit default swaps that increased almost overnight. But what has actually caused this massive flip-out? Not too long ago, China was considered as the most powerful economic engine which could have saved the entire economic world. Now, the negative reports and weak economic data that refer to China are some real reasons for panic.

It seems that the world has just lost the last resort, which could have saved economies and investors. Many investors used to consider China as the safest investment alternative when compared to Europe and U.S. Now, all these companies and individuals are about to lose important business prospects. They have to make a choice which implies both, Europe and U.S. But for the moment, the analysts consider that even if the investors are going to make the “great” shift, an ominous slowdown will hit the worldwide economy.

The financial results of the global equity markets that ended the third quarter show some worrying signs with regard to the economic crisis. The NASDAQ fell by 2.6%, Dow by 2.2%, and S&P 500 by 2.5%. These results show that the worldwide economy is not going to recover ground too soon. Moreover, this situation relates to the activity of all sectors, although specific companies have shown some great financial results. Among the companies that registered some substantial increases for the third quarter are Wal-Mart, Merck and JNJ.

However, the commodity trading revealed an important fluctuation, which related to gold, which rose with $5/ounce, and oil that went down by 4.2% at the end of this quarter. The trading was very instable within the grains sector too. This way, it showed low results for wheat, corn and soybeans, which registered important decreases between 4% and 6%. As well, it seems that copper will maintain its down trend during the upcoming period. The reason for this is because it also closed the third quarter with low quotations, sinking 12 cents per pound.

Within the currency trading, U.S. dollar has gained ground against pound, yen, euro, Canadian dollar and franc during the same period. Therefore, the U.S.’s economy has just marked a good end for the previous quarter. However, it seems that China is still losing ground. Its FXI index showed a 6.3% decrease at the end of September. Moreover, the forecasts seem to maintain the same unfavorable trend, which comes along with high inflation indices that are definitely able to destabilize the economy of China.

The latest news that relate to China reveals an economy that cannot really maintain its growing pace anymore.

Moreover, the fact that the eastern markets are going down continuously is highlighted by the last report, which shows a decrease of 7% of the copper’s value. However, the things are not that bad for the moment. But, would China be able to stimulate its economy as it did it during the first recession?

The actual situation shows that the investments in China are less efficient than before. This is especially due to the fact that the marginal profit has continuously declined during the last years. And although China has already implied different measures to stimulate its growth, this thing cannot really revive its economy. It seems that China’s economy follows the worldwide trend, which momentary goes down. The low efficiency is mainly due to the investments’ size and state interventions within the investment niche.

As well, the fact that China has developed a non-sustainable economy demands a huge price that this economic “engine” must pay. The investment projects have actually increased the debt burden in China – thing that has recently happened within almost every economy. Thus, the debt has doubled in only 2 years, showing a GDP ratio of 45%. Moreover, the latest copper chart is definitely able to show us that China’s economy is about to fall even more.